Malta opposed to services directive

Prime Minister Lawrence Gonzi, in Brussels for an EU summit, yesterday reiterated Malta's opposition to the proposed services directive, arguing it could have a negative effect on the Maltese economy.

Although the controversial directive is not one of the key items on the EU leaders' agenda, it is the issue most talked about at the moment, even by the leaders themselves.

Under the current proposals - which are opposed particularly by France and Germany - the directive would make it possible for professionals such as lawyers and doctors to work without restrictions in all 25 member states.

Critics believe the plan would result in companies shifting staff to cheaper bases in Eastern European member states, undermining large EU economies.

There are also fears that professionals from Eastern Europe could flood into the west, exacerbating the already high unemployment levels in some countries.

The European Commission is so far resisting pressure for the directive to be withdrawn.

Speaking to the press following the first session of the summit last night, Dr Gonzi said Malta had already made known its position on the directive in the various EU council formations where the subject was raised, and would keep up its resistance.

Malta, he said, was concerned about some aspects of the directive which could have a negative impact on the Maltese services sector.

Malta had similar reservations on the working time directive and has made its position known to the other member states and the Commission, he added.

He said the two directives formed part of the broader picture of the Lisbon Strategy. These were the only two issues on which the government disagreed, and Malta was in favour of nearly all the proposals being made by the Commission and the Presidency for the strategy, a revamp of which is under discussion by the leaders.

"We generally agree with the objectives and targets being proposed, particularly those related to the social dimension which we consider as very important to Malta," he said.

The Prime Minister said the review of the Lisbon Strategy was focusing on the need to have a more competitive economy, more investment in research and development and the necessary measures to create more jobs. "Malta welcomes these targets."

He stressed that Malta was already doing its part to reach the Lisbon targets, aimed at making Europe the most competitive economy in the world by 2010.

"The government is dedicating a lot of energy and money towards these objectives. We have already drawn up national action plans for employment and social inclusion and identified 81 concrete measures that we are addressing in these sectors.

"In this year's budget the government dedicated Lm5 million to addressing these issues and implementing the necessary measures."

The Lisbon Strategy, he said, should help Malta improve its quality of life. "After all, this is the main reason why Malta joined the EU."

Asked for his reaction to a report placing Malta at the bottom of a Lisbon process league table, the Prime Minister dismissed the suggestion that Malta was not making progress.

He admitted that the country was still at an early stage but said more time had to be allowed to pass before tangible progress was seen.

He said another report, published by the Commission and annexed to the Lisbon Strategy, showed that Malta was obtaining results.

As an example, he highlighted the high ranking Malta had attained for its measures to help unemployed people over 40 years of age to re-train and re-integrate in the job market.

"However, we do recognise that Malta has big competitiveness challenges before her and we are determined to make the necessary progress."

The first session of the summit yesterday focused primarily on concluding a deal on the revision of the Stability and Growth Pact, the rules that govern the euro.

The leaders retained the rule that annual budget deficits must not exceed three per cent of a nation's gross domestic product, but under the new pact have given member states more freedom to disregard this limit in "special circumstances".

The European Central Bank has expressed concern that changes in the pact could undermine confidence in European public finances.